Water and Business in Canada Part II: Managing Water Use in the Supply Chain
By: Meirav Even-Har, Toronto
In Part I of this blog series on Water and Business in Canada, I wrote about why companies should pay attention to water issues in this country and abroad, and included a list of business risks associated with water. To manage risk, the first step is to identify it, understand its potential implications, and of course, spot the exposure to it. The Global Water Tool and water footprinting assessment enable companies to better manage their water use in Canada and aboard.
First thing's first: A better understanding water related business risks...
* Physical risk: Typically, a physical risk of water shortage does not catch too many companies by surprise. Part of a permit to withdraw water requires an assessment to determine source capacity. That said, unexpected weather patterns, and the unpredictability of climate change means that long-term water resource viability is sometimes in question.
* Reputational risk: A company's corporate image may be negatively impacted due to community mistrust as to whether sustainable water use is properly addressed. Not having a social license to operate can lead to a revoked permit, or permit denial at the outset.
* Regulatory risk: As populations grow and intensify, competing water uses also lead to projected increase in regulations, for both water use and allowable discharge.
* Financial risk: The above noted risks can all lead to financial loss due to project delays, additional permitting requirements, possible relocation, and other associated problems.
Targeting physical risks
The Global Water Tool, developed by the World Business Council for Sustainable Development (WBCSD), aims to assist companies map potential physical risks relative to their global operations and supply chains. The Tool includes an input sheet that is meant to capture a company's water use, which can then be combined with country and watershed data. The second component is online mapping that enables a company to see a visual representation of "renewable water resource per capita, mean annual relative water stress index and access to improved sanitation." 
The free, online tool allows anyone to choose any location around the world and view present and future water availability. This is especially useful for companies with operations overseas, enabling a proactive approach to water use.
A deeper understanding of water use in product supply chain
The water footprint assessment has been gaining ground internationally, as companies strive to better understand direct and indirect water use in the production of goods and services. Water use is measured in terms of water volumes consumed and/or polluted.
Water and carbon footprints are different. Unlike carbon emissions, which are the same all over the world, the use of water affects each source location differently - making water management more complex. For example, a daily amount of water withdrawals in one part of Canada may have little to no negative implications, as would an equal volume taken from an already stressed aquifer. In other words, the same amount of water used, can have different implications to business depending on location.
Who is using the water footprint?
In Canada, companies such as Molson Coors, Coca Cola Canada, and the Council of Great Lakes Industries (CGLI), are all using the water footprint assessment to develop and track against reduction targets. Molson Coors, for example, communicates their "beer print" on a micro site dedicated to the "Every Drop Every Ripple" campaign launched in 2009. This multi-media site is a good vehicle to communicate water stewardship to community stakeholders.
The Global Water Tool and water footprint assessment help business understand, target and mitigate water related risks - especially physical risks. Regulatory, reputational and financial issues noted above come to light through the exercise of tracking water use and management.
Where does technology fit into efforts to reduce operational impact on water sources? Part III of this blog will explore the use of water technologies in Canada and abroad.
 WBCSD, Global Water Tool: http://bit.ly/y5CcpJ
 Molson Coors, Every Drop Every Ripple: http://www.everydropeveryripple.com/
Photo Credit: Stilles Mineralwasser (by W.J.Pilsak at the German language Wikipedia)